01/10/2012

If you or a family member are badly hurt because a big company acted recklessly, you should be able to take that company to court and be fully compensated. But in Colorado, you can’t. That’s because Colorado lawmakers have enacted some of the harshest laws in the nation limiting the rights of everyday Coloradans. And if you or your child is a patient injured in an unsafe hospital, the restrictions on your rights are even more severe.

In addition, when it comes to the personal responsibility of corporations and health care providers that cause injury or death, Colorado's laws relieve these wrongdoers of accountability for their misconduct.

Here’s why.

Caps on Non-Economic DamagesColorado is one of the few states that, in all cases, “caps” or limits compensation for “non-economic” injuries. Those are serious injuries like blindness, disfigurement, trauma, severe pain or other physical impairments that affect day-to-day life. Colorado politicians, backed by the insurance industry, passed a law capping non-economic compensation at $250,000 (with inflation adjustments, and some discretion by a judge to increase the amount up to $500,000). But certain things are not adjustable. The cap applies across the board to all cases, not just “frivolous” lawsuits. It applies no matter how much merit a case has, the extent of the misconduct by the reckless company, or the severity of an injury. And it applies no matter what Colorado jurors, who listen to the evidence in case, decide a victim needs. In fact, jurors are not allowed to be told about the cap or that their hard work reaching a careful decision will be deemed at least partially irrelevant due to this law.

What’s more, in most cases, lost earnings or wages make up the largest part of “economic” compensation that goes directly to the injured victim. Essentially then, limiting non-economic compensation means valuing the destruction of someone’s life based on what that person would have earned in their life but for the injury. So thanks to this cap, the lives of low wage earners, children, seniors, and women who do not work outside the home, are considered to be worth less than the life of a corporate executive in Colorado. (See more about the discriminatory impact of this cap here.)

This cap means that Colorado is out of step with the rest of the country. Less than 15% of the country has a non-economic damage cap that applies across the board the way Colorado's does. In fact, many states have found such caps unconstitutional because they violate a victim's right to a trial by jury. (See here.)

Caps in Medical Malpractice CasesFor patients injured by an unsafe hospital or incompetent health care provider, compensation is capped even further. Not only is there a non-economic damages cap (which, unlike the overall cap described above cannot be adjusted), there is a $1 million cap on total compensation for all injured patients – even for catastrophically-injured children who need around-the-clock care. Meanwhile, despite paying out far less in claims and malpractice awards, insurance companies have not passed these savings onto doctors and patients. To read more about how caps in medical malpractice case harm Coloradans, click here.

Caps on Punitive DamagesColorado severely limits punitive damages, which are awarded only when a company’s misconduct is purposeful and when the wrongdoer is aware his or her actions are dangerous, reckless, and without regard to the safety and rights of others. Despite this very high threshold (which is why punitive damages are rare), punitive damages have also been capped in Colorado. Punitive damages can be no more than the actual damages awarded to the victim, even for a billion dollar company that is intentionally reckless! So corporate accountability is out the window. (There are exceptions only when the conduct continues.) And drug companies that cut safety corners and act deliberately irresponsibly can never be liable for punitive damages if the drug or product is government-approved, severely undermining accountability for product safety in Colorado.

Other ImmunitiesEvery year, Colorado’s special interests line up before the legislature, with emptied pockets and outstretched hands, and ask for immunity from liability when they do something wrong. Many such laws have passed, including laws that limit liability for ballparks, ski resorts, reservoir owners, firearm manufacturers, and others. In addition, if you are injured by the government in Colorado, your ability to be compensated is severely limited. (See more here.)

Effect on TaxpayersIf someone is brain damaged, seriously impaired or rendered paraplegic as a result of the corporate or medical negligence and cannot be fully compensated from the wrongdoer (which is the impact of capping damages),he or she may be forced to turn elsewhere for compensation, like taxpayer-funded Medicaid. The costs for injuries then shift from wrongdoers to taxpayers. The more restrictions the victim faces in court – and there are many in Colorado - the higher the burden on the taxpayers. Also, preventing legitimate lawsuits – another impact of caps – weakens the deterrent potential of the tort system. With more injuries come more extended hospital stays and other expenses caring for newly maimed patients. In other words, these laws lead to higher health care costs. Everyone loses – except insurance companies.

Effect on Insurance Companies.While injured victims and taxpayers pay the price for caps in Colorado, insurance companies have reaped large rewards and fail to pass savings onto policyholders. As a 2003 Americans for Insurance Reform study points out, since 1975 in Colorado, the amount of premiums that doctors have paid to insurers have gyrated up and down almost precisely with the insurer’s economic cycle, which is driven by such factors as insurer mismanagement and changing interest rates. Premiums have had no relation to claims or lawsuits, which have generally declined since the 1980s. Meanwhile, according to a 2007 Americans for Insurance Reform study, Colorado medical malpractice insurers saw an 18.9% return on net worth. This was not only higher than that of the medical malpractice insurance industry, with an overall return on net worth of 15.6%, but well over the 12.5% overall profit for the entire property/casualty industry.

If you would like to do something, please go here to find out how to contact your state representatives!